Rockefeller Group, Mitsui Kick Off 2 MSF Development
Two of the three buildings are coming online next year.
Rockefeller Group and MBK Real Estate, a subsidiary of Mitsui & Co. Ltd., have started construction on the first phase of a 2 million-square-foot distribution campus in central Pennsylvania, dubbed Silver Spring Logistics Park. The partners had acquired a 182-acre former farmland site in Silver Spring Township, Pa., for the development. CBRE represented the seller, with a different CBRE team now handling the new development for sale or lease.
Work is now underway on a 803,520-square-foot building and another one at 318,060 square feet. The two are slated to come online by Spring 2026. The third building, at 892,620 square feet, will follow.
“While the current economic climate for industrial is absolutely challenging, development deliveries run throughout real estate cycles,” Rockefeller Group Vice President & Regional Director of North Central Development Heath Abramsohn told Commercial Property Executive.
Rockefeller’s strategy with Silver Spring is to deliver a Class A product in an already supply-constrained submarket, Abramsohn said, and thus the project will be delivered (mid-2026) when the company believes there will be greater macro market stabilization.
Silver Spring Logistics Park rises at Carlisle Pike/U.S. 11, roughly 3 miles from its junction with Interstate 81. The site is about 20 miles from Harrisburg International Airport, and a little less than 90 miles from the Port of Baltimore.
READ ALSO: There’s More AI in Investment Than Meets the Eye
All of the buildings will include 40-foot clear heights and 185-foot truck courts. The two 800,000-plus square-foot buildings will be cross-dock, and all of the buildings will have truck and automobile parking.
The development represents the Rockefeller Group’s entry into central Pennsylvania. The private developer, whose CRE portfolio is diversified and nationwide, currently has 18 industrial projects underway totaling about 25 million square feet. This year, the company has also started development of a 558,000-square foot logistics park in Baytown, Texas, and a 500,000-square-foot logistics park in Antioch, Calif.
Rockefeller’s list of large projects includes a 5 million-square-foot industrial campus in the Hampton Roads area of Virginia, as well as a New Jersey development.
Economic uncertainty clouds central Pennsylvania industrial
Industrial space demand has taken a dive in central Pennsylvania, according to CBRE, which chalks up the most recent decline to economic uncertainty created by trade policy in the the first quarter. Leasing activity, however, was already slowing down due to higher interest rates.
The sector averaged nearly 2 million square feet of leasing activity during each quarter from early 2020 through mid-2022, when the Fed started raising the target interest rate. Since then, 3PL leasing activity averaged around 1 million square feet per quarter, CBRE reported, but during this year’s first quarter, tenants leased less than 500,000 square feet, making for negative absorption of 2 million square feet for the quarter.
READ ALSO: What Global Trade Shifts Mean for US Industrial
On the supply side, only 743,000 square feet of new industrial projects broke ground during the first quarter, the smallest number of starts since the third quarter of 2013, in the wake of the Great Financial Crisis, CBRE noted.
Though at a slower pace, some space is still coming on the market, edging vacancy up to 8 percent in the first quarter. As recently as three years ago, industrial vacancy in central Pennsylvania was below 2 percent.
You must be logged in to post a comment.